DoubleDragon files REIT application with SEC

November 24, 2020 | 12:05 am [ bworldonline.com ]

 

DDMP REIT, Inc. has submitted an application to the Securities and Exchange Commission (SEC) for a real estate investment trust (REIT) offer.

The firm, formerly known as DD Meridian Park Development Corp., on Monday submitted to the SEC its REIT plan to sell to the public 5,942,488,469 common shares at P2.25 apiece, with an over-allotment option of up to 594,248,847.

The shares include existing common shares offered by DoubleDragon Properties Corp., Benedicto V. Yujuico and Teresita M. Yujuico.

The company will not receive proceeds, but total proceeds to be raised in the sale of offer shares will be around P14.7 million. Selling shareholders will receive a net of P14.2 million, with the full exercise of the over-allotment option.

The offer shares will represent around 36.67% of the issued and outstanding capital stock of the company after the offer is completed, assuming that the over-allotment option is fully used.

Shares amounting to 17,827,465,406 will be outstanding after the firm offer.

The company’s property portfolio includes three commercial properties with six office towers that have retail businesses – DoubleDragon Plaza, DoubleDragon Center East, and Double Dragon Center West. — Jenina P. Ibañez

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Makati seen to lag in recovery of rent, residential prices

November 20, 2020 | 12:32 am [ bworldonline.com ] 

A rebound in rents and residential prices in Makati City is seen by the third quarter of 2022. — REUTERS

RENTS and residential prices in the Philippines are expected to start recovering by 2021, except in Makati City which may continue to see a decline for a longer period, a recent survey of real estate agents found.

In a Property Survey and Index Q4 2020 report, published by real estate technology group Juwai IQI on Thursday, 192 real estate agents in the Philippines were surveyed and found to anticipate a bounce back in the industry by next year.

On a nationwide basis, residential prices are expected to grow 2.3% by the third quarter of 2021, and by 16.9% by the third quarter of 2022.

However, Makati City will continue seeing a 2.3% decline in residential prices over the same period next year, and will only record a growth of 14.8% by the third quarter of 2022.

“After Makati City CBD (central business district) residential prices rose nearly 132% in the nine years to 2018, the capital city market is now weaker than much of the rest of the nation. The industry expects this weakness to continue, with Makati City prices and rents trailing the national trend over the next two years,” Juwai IQI said.

The national residential rent rate is expected to improve by 1.9% in the third quarter of 2021, and by 13.2% in the third quarter of 2022. However, Makati City is seen to post a decline of 6.6% next year, before growing 12.3% in 2022.

“Several factors are probably at play with the lower price expectations in the capital city. COVID (coronavirus disease 2019) has cut foreign buying, the majority of which is focused on the capital city. Also, the price lag is a continuation of the trends from earlier in the year,” Juwai IQI Group Co-Founder and Executive Chairman Georg Chmiel said in an e-mail to BusinessWorld.

“(Makati City) has had a tremendous run-up in prices in recent years, and is now taking a breather. Potential buyers aren’t sure if they can still expect the rapid price gains of recent past, so many more are willing to sit on the fence until they have a better expectation for gains or can get a better bargain,” he added.

Meanwhile, the improvements in rents and residential prices in the rest of the country will depend on “a return to near normalcy,” Mr. Chmiel said. “Economic growth, employment, construction, and foreign travel will all bounce back and drive new buyer interest.”

The survey also found that most real estate agents expect foreign investors to be the primary source of buyers next year. They also expect to see demand from local investors, local buyers that are upgrading their properties, and first-time local buyers.

Among the foreign buyers, most are expected to come from Mainland China, followed by Hong Kong, Taiwan, America and Singapore.

“The industry believes that foreign buyer demand remains relatively robust. Approximately half of all agents in the survey report that mainland Chinese are likely to complete more transactions in the fourth quarter than earlier in the year — both nationally and in Makati City,” it said.

Most of these transactions will be driven by offshore gaming companies, while others by retirement-driven motivations.

The strong demand for residential properties in Makati City, the Bay Area, Ortigas, and Quezon City last year was attributed to the influx of Chinese nationals employed by Philippine Offshore Gaming Operators (POGOs).

However, more POGOs are exiting the country due to the pandemic, slowing demand and the Chinese government’s crackdown against offshore gambling. — Denise A. Valdez

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Vista Land plans REIT offering, sees recovery signs as income falls

November 17, 2020 | 12:07 am [ bworldonline.com ]

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VILLAR-LED Vista Land & Lifescapes, Inc. is keen on doing a real estate investment trust (REIT) offering for some of its leasing assets to improve its financial position during the coronavirus pandemic.

In a statement on Monday, the property developer said it is  “seriously looking at the possibility of doing a REIT with our 1.5 million square meters GFA (gross floor area) leasing portfolio.”

It noted 15% of its leasing portfolio is made up of office spaces occupied by business process outsourcing tenants, which have remained operational throughout the past months of the lockdown.

The rest are from malls, which Vista Land said are occupied mostly by tenants offering essential services.

“Rest assured that Vista Land is continuously making the necessary adjustments to operate effectively in the new normal and is strengthening our financial and operational positions to be able to address the needs of all our stakeholders,” Vista Land President and CEO Manuel Paolo A. Villar said in the statement.

Also on Monday, the company reported that its earnings in the nine months through September dropped 39% to P5.5 billion. It recorded consolidated revenues of P25.7 billion, down by 25% from the same period last year.

Without disclosing details, it said its third quarter-performance improved against the previous quarter, as activity started picking up when the government relaxed quarantine rules beginning June.

“This pandemic continues to impact our performance, both on our leasing and residential businesses. However, as mentioned before, we are glad to have seen encouraging signs of recovery when the economy started to reopen last June,” Vista Land Chairman Manuel B. Villar, Jr. said in the statement.

The company plans to launch more residential projects in the fourth quarter to add to the five projects that it launched in the past nine months, which were valued at P5 billion.

It is allocating P25 billion for capital expenditures this year, of which some 71% has already been spent.

Shares in Vista Land closed at P3.82 each on Monday, up four centavos or 1.06% from the last session. — Denise A. Valdez

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SEC waives fines for missed, late corporate reports

November 11, 2020 | 12:08 am [ bworldonline.com ]

THE Securities and Exchange Commission (SEC) will not be fining companies that were not able to comply with deadlines to file regulatory requirements during the lockdown.

The corporate regulator issued Memorandum Circular No. 31 on Nov. 5, which was uploaded on its website Monday, to waive supposed penalties for violations incurred in the past months.

These include the late and non-filing of General Information Sheets, Audited Financial Statements and other reportorial requirements that the SEC asks from regulated firms.

The non-imposition of fines will apply for violations falling between Sept. 14 and Dec 19. Otherwise, the SEC will continue to implement corresponding fines and penalties.

The regulator said the circular is in line with Republic Act No. 11494 or the Bayanihan to Recover as One Act, also called Bayanihan II, which was signed into law on Sept. 11.

The law provides that the SEC and other regulatory agencies should “desist from imposing fines and other monetary penalties for non-filing, late filing, failure to comply with compulsory notification and other reportorial requirements relating to business activities and transactions… during the community quarantine.”

The SEC noted the relaxation of rules will also cover all foreign corporations except on matters relating to securities deposits and change of resident agent.

The circular takes effect immediately.

Prior to the signing of Bayanihan II, the Philippine government enacted Republic Act No. 11469 or the Bayanihan to Heal as One Act in March, which similarly sought to offer relief for SEC-regulated entities.

Accordingly, the SEC issued memorandum circulars that extended submission deadlines for reportorial requirements, on top of requiring grace periods for loans due during the strict lockdown.

Parts of the Philippines, including Metro Manila, remain under community quarantine due to the continuing spread of the coronavirus disease 2019. As of Monday, a total of 398,449 infections have been recorded by the Health department from the start of the outbreak. — Denise A. Valdez

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Robinsons Land plans REIT offering in 2021

November 6, 2020 | 5:35 pm [ bworldonline.com ]

By Denise A. Valdez, Senior Reporter

Robinsons Land Corp. (RLC) is forming a real estate investment trust (REIT) company for some of its office assets, with plans for its listing at the stock exchange next year.

“To create further opportunities for growth, RLC is looking to list a REIT company for some of its office assets in CY (calendar year) 2021. It plans to infuse a significant number of its existing office buildings into the new REIT company,” it said in a statement Friday.

The Gokongwei-led property developer currently has 25 office buildings in its portfolio, equivalent to more than 600,000 square meters (sq. m.) of net leasable area.

If it successfully lists, RLC would be the second company to do a REIT offering in the Philippines, following Ayala Land, Inc.’s listing of AREIT, Inc. last August.

Aside from RLC, DoubleDragon Properties Corp. also announced a plan to do REIT listings annually from 2020 through 2025 for some 200,000 sq. m. of leasing assets every year.

REITs are the latest product offering of the Philippine Stock Exchange to boost activity in the stock market. It allows investors to earn dividends from specific revenue-generating properties of developers.

EARNINGS PLUNGE

Meanwhile, RLC reported its third quarter earnings plunged 78% to P717 million, from the P3.31 billion it reported in the same period last year.

Despite the decline, RLC said it saw signs of recovery as its third quarter bottomline improved 38% from the P518 million it recorded in the second quarter.

For the January-to-September period, the company booked a net income of P4.4 billion, about 40% lower from the P7.31 billion it posted last year. Consolidated revenues also fell 11% to P20 billion.

RLC said the softer revenue decline is due to its development portfolio, which grew by 33% to P9.84 billion, accounting for 49% of its consolidated revenues. This partly offset the 33% revenue decline in its investment portfolio to P10.17 billion.

By business segment, commercial centers added P4.8 billion revenues, halving the P9.7 billion revenues it reported the same period last year. This is due to fewer operating tenants and lower foot traffic at its malls because of lockdown restrictions.

Office buildings generated P4.34 billion revenues, up 20% from a year ago, due to the sustained demand from business process outsourcing and locators looking for flexible workspaces.

The residential segment posted P9.75 billion in revenue, growing 36% year-on-year, on the back of sustained take-up that reached P5.96 billion. RLC noted it was able to launch P10-billion worth of new projects this year.

RLC’s hotels and resorts booked P856.4 million in revenues, dropping 49% from the P1.69 billion it reported a year ago.

Revenues from its operational industrial facilities doubled to P164 million, while recognized revenues from commercial and industrial lot sales stood at P85 million.

“We are encouraged by the steady recovery of our businesses on the back of improving trends seen on a quarterly basis, as well as in October. Increasing customer engagement and the sustained interest from external partners give us confidence that business will continue to pick up in the coming months,” RLC President and CEO Frederick D. Go said in the statement.

“For the remainder of the year, we will continue to focus on operational recovery while implementing strict safety protocols,” he added.

RLC’s capital expenditures reached P10.41 billion for the nine-month period, about 43% of its P24-billion allocation for the year. This went to land acquisitions and the development of malls, offices, hotels and warehouse facilities. The company also spent on the construction of local residential projects.

Shares in RLC gained 40 centavos or 2.44% to close at P16.80 each on Friday.

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South Luzon seen as an emerging residential hotspot outside the capital

October 30, 2020 | 12:01 am [ bworldonline.com ]

Seafront Residences, AboitizLand’s beachside development in San Juan, Batangas, is the perfect location to work remotely with beautifully-designed homes by Budji+Royal and stunning views of Tayabas Bay and Mt. Banahaw. (Actual Photo)

Along with the new normal, the pandemic continues to reshape market preferences in real estate, as the industry shows continued resiliency. Industry watchers are seeing a growing shift from the metro to less-dense locations, made possible by online modes of working, learning, and commerce. Even vacation properties, which used to be regarded as secondary homes, are now being considered as principal residences in the post-pandemic era.

Property listing site Lamudi reports that 83% of respondents on its site have been considering properties away from central business districts. Coincidentally, a similar shift is seen in house type preferences, as house-and lot units have become more attractive to property seekers.

AboitizLand, the Aboitiz group’s real estate arm, sees opportunities in these trends with its South Luzon properties Seafront Residences and The Villages at Lipa benefiting in increased market interest. 

After two decades of developing Cebu’s premier developments, AboitizLand began its national expansion in South Luzon in 2017 with Seafront Residences, a 43-hectare premier seaside community in San Juan, Batangas. After launching several communities in Central Luzon for the next three years, it continued its growth in the South with a fully-integrated community, The Villages at Lipa in Batangas. 

South Luzon sees steady economic growth

 Low density condominiums with just 10 units in each building allows safe and relaxed seaside living only in Seafront Residences. (Artist’s Perspective)

The economy of Region IV-A, comprising Cavite, Laguna, Batangas, Rizal, and Quezon (CALABARZON), has remained decidedly resilient, growing by about 6.3 percent a year from 2016 to 2018, making it one of the fastest growing centers in the country. 

Contributing to the growth are infrastructure projects slated to be completed by 2021, such as the North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) Connector Road. Aiming to cut travel time between the two expressways to just 20 minutes, this project stokes demand for industrial space and complementing residential and commercial properties. 

Home to next wave cities Dasmariñas in Cavite, Sta. Rosa in Laguna, and Lipa in Batangas, South Luzon also attributes its growth to the industrial segment, attracting global players with its robust information technology and manufacturing industries. This constant progression has buoyed demand for integrated communities and standalone residential developments in the region.

Integrated, future-ready communities

 AboitizLand’s The VIllages at Lipa boats of signature features like diamond parks and greenbelts — natural green open areas in a network of walkable spaces and amenities. (Artist’s Perspective)

One such example of a development is AboitizLand’s The Villages at Lipa. Nestled inside LIMA, the Aboitiz group’s industrial-anchored township seen to be the next leading mixed-use economic center in the south, The Villages at Lipa provides families with a complete township lifestyle, complemented by LIMA Technology Center, The Outlets at Lipa, LIMA Exchange, Aboitiz Pitch, LIMA Business District, and academic institutions. Situated in Lipa and Malvar, Batangas, the 49-hectare community is far enough from congested megacities but close enough to be able to drive to the familiar sights and sounds of Metro Manila.  

Second homes on the rise 

Opportunities also abound for investors in the market for what used to be considered second homes. With buyers wary of current stock values, relatively stable real estate investments are becoming more attractive.

With work-from-home arrangements becoming the norm, property seekers are more discerning of amenities as people look for home features that allow them to achieve work-life balance while in quarantine.

Seafront Residences provides the attractive prospect of relaxed living by the sea. AboitizLand’s premier beachside community is master-planned by Florida-based DPZ, thought leaders on new urbanist communities, and features designer homes by Budji+Royal. With access to balconies and azoteas, and the many creature comforts of a highly amenitized community, having a stunning view of Tayabas Bay and Mt. Banahaw is now possible even while working remotely.

For those who are looking for apartments living outside the city, Seafront Residences also offers Seafront Villas, a collection of low rise and less dense condominiums with just 10 units in each building. Within a short walk from the beach, lots are also available for those that plan to have houses built or for property appreciation.

Green, less dense spaces preferred 

Environmentally-conscious developments will also become more attractive to people who look towards low-density areas that offer house-and-lot type properties with generous green, open spaces, making social distancing norms possible.

Both Seafront Residences and The VIllages at Lipa communities are characterized by signature features like diamond parks and greenbelts — natural green open areas in a network of walkable spaces and amenities.

Developers adapt to shifting market needs 

Aiding the shift towards these growth centers are property developers adjusting to consumers’ needs with a pivot towards digital and contactless selling, adjusted payment terms and discounts, as well as banks offering low-interest rates to ease homebuyers into investing during a pandemic.

AboitizLand is one of the first developers to respond to changing market needs by taking their operations online and offering end-to-end, digital-based homebuying. As a result, a strong sales take up was seen during the second and third quarters of the year, beating the company’s last year sales figures for the same quarters.

Know more about how life is better at AboitizLand through its contactless homebuying service. To learn more about Seafront Residences and The Villages at Lipa, along with the rest of their residential properties, visit their website at www.aboitizland.com. 

 For over 25 years, AboitizLand has stayed true to its promise of creating better ways to live through its thriving master-planned communities. A subsidiary of the Aboitiz Group, it is built on a firm foundation with a hundred-year heritage of advancing business and communities. For more information about AboitizLand, visit www.aboitizland.com.

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Coronavirus pandemic pushes millennials to home ownership

November 4, 2020 | 12:31 am [ bworldonline.com ]

By Denise A. Valdez, Senior Reporter

MAE E. DIZON (not her real name), 24, bought a P2-million house and lot in Cavite province at the height of the coronavirus pandemic in June as an investment after getting a hefty performance bonus from her company.

“Before the pandemic, I planned several out-of-the-country trips,” she said in a Messenger chat. “The money I originally allotted for those went to the house.”

Ms. Dizon, who works as a trainer at PruLife in the financial district of Taguig City, is part of a growing number of young property buyers who now spend less on travel and leisure and take more interest in the liquid real estate market.

 With massive joblessness, wage cuts and business failures, one would expect people to be more cautious about making the biggest investment of their lives — buying a house.

House prices have been falling as the world goes through the worst global economic crisis since the Great Depression in the 1930s, causing some nations to enter into either a recession or depression

Residential prices are expected to drop by 13% by yearend, as vacancy increases to 15.3% amid subdued demand for completed projects, property consultancy firm Colliers International Philippines said.

Phinma Property Holdings Corp.’s clients aged 20 to 30 years rose significantly during the health crisis, according to Chief Executive Raphael B. Felix.

“One reason is because their spending patterns changed,” he said in a Zoom Cloud Meetings call. “There are travel restrictions, so they can save a lot more.”

Twenty-five-year-old Jon Michael V. Mendoza’s savings grew during the lockdown, having skipped going to the beach or weekend parties simply because there were none.

After getting a job promotion in May, he bought a condominium unit in Pasig City. He’d been looking at property ads on social media, and he bought it because opportunities were too good to pass up.

“Condominium prices went down,” Mr. Mendoza said in a Messenger call. “I was comparing current rates with what I was given when I talked to agents last year. Prices really fell.”

While residential take-up slowed by 28% to 24,900 units in the nine months through September, sales remain good considering the current conditions, said Joey Roi H. Bondoc, research manager at Colliers.

“We still attribute the good sales performance during the period to attractive payment terms offered by developers,” he said in an e-mail. “We see these flexible schemes being extended to buyers of mid-income to ultra-luxury projects.”

During the lockdown, two-thirds of the buyers of Imperial Homes Corp., which develops solar-powered houses, were millennials, Chief Executive Officer Emma M. Imperial said at a recent virtual roundtable discussion.

“The performance of sales with the millennials coming in just shows that they like sustainability products right now,” she said. “Before the pandemic, the millennials did not care about investing in houses. They cared about buying cars or even buying their gadgets.”

Aside from the extra savings and flexible payment terms, changing living situations caused by the pandemic have pushed the younger generation to look for property.

When the entire Luzon island was locked down in mid-March to contain infections, Odessa Louise V. Mauricio, 24, went back to her family’s house in Caloocan City and left her condominium unit in Bonifacio Global City.

“It was nice for a few months,” she said in a Messenger chat. “But then it came to a point when it was tiring to be in a house where there’s so much going on.”

She has since gone back to her condo unit. “It’s hard when you have people knocking and the dogs barking,” she said of her family home. “Plus, there’s no sunlight there.”

In April, she closed a deal to buy a yet-to-be-built condominium unit in Pasig City. She said she doesn’t regret her decision, adding that having your own house is ideal if you work from home.

The coronavirus pandemic, which has sickened almost 400,000 and killed more than 7,000 people in the Philippines, is shaping how the younger generation is spending money for the future, Mr. Felix of Phinma Properties said.

“This pandemic gave this generation the realization, ‘Well, there’s only so much community that we can have. We also need a place of our own,’” he said.

He added that the growth of the shared economy in recent years might have seen its limits during this crisis, as people try to distance themselves from potential carriers of the virus.

Property has also become a more viable option for investment because of its expected appreciation over the years, Mr. Felix said.

“One of the things that this generation may have come to realize is that real estate is the safest investment,” he said. “The stock market is volatile. Interest rates are plummeting. Money markets are giving you nothing.”

Colliers advises property developers to continue building projects within integrated communities because buyers will prioritize living spaces with easy access to essential goods and services.

“We encourage developers to highlight the integrated features of their residential projects because this is likely to be among the major considerations of unit owners post-lockdown,” Mr. Bondoc said.

“The pandemic gave me more time to really consider my decision,” Ms. Dizon, mentioned at the outset, said in mixed English and Filipino. “I had planned to buy a house but not this soon.”

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